Has Britain found its nerve? Not if our military becomes irrelevant

My Week

Click to follow
The Independent Online

At a reception on Wednesday to mark the start of celebrations of the CBI’s 50th year, director-general John Cridland picked out the good and the bad of 1965.

While three business groups were merging to better make their case against the trade unions and Prime Minister Harold Wilson, the young Cridland remembers vividly the cry of “Thunderbirds are go!” from his black-and-white TV set.

It was also the year that the TSR-2 strike aircraft programme was cancelled, something that gives him a twinge of regret every time he visits the Imperial War Museum in Duxford, Cambridgeshire. Designed for low-level, high-speed reconnaissance during the Cold War, the TSR-2 was stuffed with the latest technology but became a victim of cost overruns or, as Mr Cridland puts it, Britain lost its nerve.

Has it found its nerve, 50 years on?  Mr Cridland, who carved up a giant Greggs birthday cake with staff on Thursday morning, would say so. The financial crisis toughened up most businesses, and Britain’s economic growth rate is one that other nations want to catch. Boosting investment levels and exports are a work  in progress.

Yet does that nerve show itself in  the defence world, where the spectre  of cost overruns frequently overshadow  the cutting-edge technology on show?  The other week, Ian King, the chief executive of BAE Systems, gave a rare speech, paving the way for the strategic defence and security review expected  soon after the election.

The review, he said, was “an important milestone” in deciding on Britain’s “future posture and place” in the world. Mr King also acknowledged concern over so-called “exquisite systems”, which I take to mean those that are over-specified to deal with undetermined future threats – like Donald Rumsfeld’s “known unknowns”.

There won’t be much posturing to be done if further defence spending cuts leave the country’s already denuded military unable to afford the basics. At stake is a future air-combat system which might feature unmanned aircraft. It is the type of technology that the inhabitants of Tracy Island could have only dreamed of 50 years ago. I suspect they will have to dream a little longer, whoever is in power after 7 May.

Fairhead won’t be praised for HSBC role

Douglas Flint can have a day off on Monday. The HSBC chairman hasn’t been called to give evidence to Margaret Hodge’s Public Accounts Committee on the subject of tax avoidance and evasion. His chief executive, Stuart Gulliver, and Rona Fairhead, the BBC Trust chair and an HSBC non-executive director, will appear. It might have been a good time for the bank’s former boss, Lord Green, to speak up too.

The knives are out for Ms Fairhead, who was appointed to the HSBC board  11 years ago. With that length of service, I was surprised to see she is standing for re-election again in May.

The board considers her still to be “independent in character and judgement”, and her longevity after having chaired the bank’s North American subsidiary brings with it “considerable benefit”.

Yet juggling the three-days-a-week BBC role with directorships at HSBC and Pepsico looks too much. Sure, she has short-dated her BBC Trust job by questioning whether the corporation could be served better by an external regulator, but that doesn’t reduce the workload. Maybe Ms Fairhead will get credit for seeing the job through at HSBC, which  has been rocked by a string of fines. But  I doubt it.

Fallout from nuclear sale could bring £3bn

A decent result in offloading the government’s stake in Eurostar this week, coining in £757m for state coffers. No sooner was that done than George Osborne set a post-election bear trap, pledging to proceed with the sell-off of the Royal Bank of Scotland as soon as possible. It was an aim that eluded the Chancellor in this Parliament, so there is little risk in throwing it forward to the next.

Another deal that is dragging is the disposal of Urenco, the uranium processor co-owned with the Dutch and Germans. It is a far bigger concern than Eurostar, contributing £76m in dividends to Britain compared to the train operator’s £7m, and could bring in £3bn for Mr Osborne.

Urenco’s annual profits got lost in a slew of corporate news this week, but an 11 per cent growth in earnings suggest it is in good shape, even if the restart of nuclear reactors in Japan after the Fukushima meltdown will put pressure on pricing. The problem, it seems, is Germany, which is looking for guarantees that safeguard the company’s technology and security. Like RBS, this asset has a longer half-life than the Treasury would have hoped.

Pop-ups are set to be a permanent fixture

I chaired a panel discussing the economic outlook for the West End of London this week. Retail entrepreneur Ross Bailey took part, and made a convincing case that the pop-up shop concept is here to stay. His company, Appear Here, has helped to open 700 stores in the last year in London with lease lengths typically of three to six months.

Rather than filling up unwanted space with traders selling remaindered stock, landlords are starting to view the idea as a way of keeping the high-street mix of shops fresh – important when even the West End saw a decline in footfall last year.

Mr Bailey’s biggest problem seems to be that he hates the term “pop-up”. It’ll have to do for now as the alternative, “short-term retail space”, is far less exciting than the prospects.